Modtech Holdings Inc. Announces Pending Equity Infusion

Modtech Holdings, Inc. (Modtech) (Nasdaq:MODTE) has
executed a non-binding term sheet for a private placement of equity
securities in the aggregate amount of $11.7 million.
   Modtech will use the proceeds to strengthen its balance sheet and
to offset the recent losses on the Heritage High School project.
   Pursuant to the term sheet, the investors will purchase shares of
Modtech's common stock at $5.67 per share, based on 85% of the average
of closing prices for the period from May 26, 2005, through June 2,
2005. Also included are five-year warrants to purchase additional
shares equal to one-half the number of shares initially sold. The
warrants will have an exercise price of $8.00 per share. The financing
is expected to close in early July 2005 but is still subject to
further negotiation and the completion and execution of a definitive
purchase agreement.
   The investors include Peninsula Capital Management, Inc.;
Peninsula Catalyst Management, Inc.; Gruber & McBaine Capital
Management; other institutional investors; and certain members of
Modtech's management and board of directors.

   About Modtech Holdings, Inc.

   Modtech(TM) is a leading national designer and manufacturer of
modular buildings, both permanent and relocatable. In the school
industry, the Company has advanced typical modular building technology
to greater dimensions of flexibility and architectural integrity.
Modtech(TM) has substantial product and geographic diversification
throughout the southwestern states and a growing presence in Florida
and Texas. Modtech's commercial and industrial buildings are sold to a
diverse end-user market and may be leased through national, regional,
and local dealers. The Company also designs and manufactures modular
buildings to customer specifications for a wide variety of uses.
   Some statements in this press release may constitute
"forward-looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1995. Such forward-looking
statements involve known and unknown risks, uncertainties and other
factors that may cause the actual results, performance or achievements
of the company to be materially different from any future results,
performance or achievements expressed or implied by forward-looking
statements. Refer to the Company's filings with the Securities and
Exchange Commission for further discussion of such factors. The
forward-looking statements are made as of the date of this press
release and the Company assumes no obligation to update such
statements.